Can your payroll handle the complexity of NMW?

paiyroll® National Minimum Wage report

The government recently announced increases to the National Minimum Wage (NMW) in April 2020 with further legislation changes expected. Implementing and verifying adherence to this legislation is complex, difficult to understand and often involves manual setup and checking. It generally relies on payroll teams and their finance directors to ensure their companies adhere to the legislation and do not fall foul of government penalties, putting a lot of stress on these teams as deadlines approach.

The complexities of NMW should not be underestimated. Companies that have workers on a mix of salary, hourly or even piece work have to check their individual as well as consolidated rates. Workers age, holidays, benefits such as accommodation, or even travel time may need to be factored in. Also don’t forget that rates change each year, so just because your company met the rates last year, doesn’t mean all is well for the coming year. NMW adherence should be monitored on an ongoing basis, linked to payroll periods and not just once year when the government announces increases or new legislation.

Fortunately, advances in RPA (Robotic Payroll Automation) could help to reduce the effort, stress and cost associated with this. An RPA platform can load your payroll data, automate the checking of this data against current legislation, flag any violations of current rates and give you a sensitivity analysis of how close you are to current  rates. It can do this on an ongoing basis and will track changes in legislation.

Wouldn’t it be great to know that you are not risking any penalties, know how close you are to the limits and not be faced with panic and unbudgeted pay rises or penalties in April. Not forgetting the reduced stress on your payroll team?